Over the years, fintech has become a major part of our everyday lives. These services make it easier to make financial transactions from depositing a check to sending money to a friend or family member. Fintech has been around for decades, as Freedom Debt Relief reviews, however the most recent innovations have given us more efficient ways to interact with money. Billions of dollars are being invested in fintech to fund its growth.
What is Fintech?
Fintech or financial technology is essentially any type of technology that’s used in the financial services industry. The phrase “financial technology” was first used by Citicorp in 1993. Fintech applies to technology that consumers use to make transactions with each other and banks. It also refers to technology that companies use to facilitate their business.
Even before the most recent fintech boom, we’d been using fintech in our everyday lives. When you use a credit card, debit card, ATM, online payment you’re using fintech, Freedom Debt Relief reviews. Before now, financial institutions had been the primary drivers of fintech innovation, creating solutions that made it easier for customers to complete daily transactions.
Fintech After the Credit Crisis
After the credit crisis of 2008, banks were hit with new regulations and compliance requirements through the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. These regulations made it difficult for traditional financial institutions to focus on innovation. While financial institutions spent their time and resources on combing compliant, startup businesses began to disrupt the market, creating new business models without the restrictions that comes with traditional banks. Freedom Debt Relief reviews the newest players in the fintech space who have made an impressive impact on the industry.
In only a few short years, fintech has changed how consumers bank and what consumers expect from financial service providers. There’s little need to ever visit an actual bank branch. With websites and mobile applications, nearly every banking transaction can be done remotely. Many banks are taking advantage of chatbots to communicate with customers rather than using tellers or live agents.
In some cases, fintech is replacing banks all together. For example, fintech gives the unbanked and underbanked a way to store and access their funds without having to open up a deposit account at a traditional financial institution, as indicated by Freedom Debt Relief reviews.
Online and mobile shopping have increased significantly in recent years, increasing the usage of digital payments and mobile wallets to complete transactions.
Insurance providers are able to collect and analyze client data to provide tailored products to their customers.
While the newest fintech providers have made major disruptions in the financial services industry, Freedom Debt Relief reviews show traditional banks haven’t given up on competing. A few of the largest banks – Bank of America, BB&T, Capital One, JPMorgan Chase, and Wells Fargo – partnered to create Early Warning Services LLC. So far, the company has already introduced Zelle, a person-to-person payment service, which would compete with Paypal, Venmo, and Square Cash.
As time passes, it will be interesting to see how the larger banks continues to respond to the fintech innovations created by startups. Will the fragmented fintech space begin to converge? And how will banks respond to the newest developments? The changes will be interesting to watch as the fintech industry continues to evolve.